HDB resale prices increase slightly in Q2 following the outbreak of Covid-19

    • In the second quarter of 2020, resale prices of the HDB flats rose slightly during the Covid-19 break relative to the first quarter of the year.
    • As per the latest HDB flash estimates published on 1st July, the resale price index went up by 0.2% at 131.8 compared to Q1. More detailed information will be released on July 24.
    • HDB will offer some 7,800 Build-To-Order (BTO) flats in August in Ang Mo Kio, Bishan, Chua Chu Kang, Geylang, Pasir Ris, Tampines, Tengah and Woodlands.
    • HDB will also bring another 5,700 flats in Bishan, Sembawang, Tampines, Tengah and Toa Payoh to the market in November with flats in Chua Chu Kang, Tampines North and Tengah expected to have a shorter waiting time.
    • Christine Sun, head of research and consultancy at OrangeTee and Tie, said HDB resale flat prices have stayed fairly steady in the last two quarters, given that “the macroeconomy is now in totally uncharted waters.”
    • However, HDB resale volume plunged heavily in with just 789 resale flat transactions in April and May compared to 3,985 resale flats sold during the same period in 2019.
    • The decline in resale volume in Q1 can be highly attributed to the pandemic, and the restrictions on house viewings during the circuit breaker period as physical house viewing is very important for the resale market as most of the buyers prefer to physically inspect the premises before making the purchase.
    • Despite the decline in sales volume, prices remain stable as there was little panic selling largely due to the huge stimulus package announced by the government in recent time.
    • The prices won’t go down much unless and until the economic conditions worsen badly and the unemployment rate remains moderate. The prices are largely expected to remain between -2% to 1% respectively.
    • Home owner will also give more importance to their homes owing to the work from home arrangement during the circuit-breaker and will not be willing to sell their units at highly discounted prices.
  • Nonetheless, other variables, such as the availability of BTO flats and the amount of flats that exceed the minimum occupancy time, may have a greater effect on the HDB resale market in the long term.

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